NEW YORK CITY-A court judge Thursday granted preliminary approval of a class-action settlement with the Malkin family and a group of investors, who are seeking to combine the management of the iconic Empire State Building with 18 other properties into a publicly traded REIT. Judge Peter Sherwood, in New York County Supreme Court, was charged with evaluating a previously reached settlement agreement—which would enable the group to pay out $55 million to be distributed among investors—after another investor group raised objections to the agreement, reports the Wall Street Journal. The hearing is only considered preliminary approval however; the Judge ordered a final hearing to be held on May 2nd, according to Judge Sherwood's decision.

On that occasion it will be determined if the settlement agreement is “fair, reasonable and adequate” and whether the settlement should “finally be certified as a class action,” according to the Judge's decision. The judge also stipulated that parties to the class action “may opt out to preserve any right to pursue potential claims for money damages.”

Attorney Stephen Meister, of Meister, Seelig & Fein, who represented the investor group that objected to the settlement, tells GlobeSt.com that a significant premise of the REIT plan—on which the settlement hinges—is “illegal.” The proposed plan, under which the restructured organization would be known as Empire State Realty Trust, with those behind it looking to raise $1 billion in the IPO for their newly formed organization, calls for a vote among all 3,300 investors, he says. If 80% of voters are in favor of the plan and 20% either object or abstain from voting, those in the minority are subject to a buyout for about $100 a share.